Volume Down but Pricing Stable in Class 8 Market
Trucks sold in January continue to bring strong money, with depreciation essentially nonexistent month-over-month. There appear to have been fewer buyers in January, but those who did write a check were paying similar money to last month.
The average sleeper tractor retailed in January was 70 months old, had 467,599 miles, and brought $56,379. Compared to December 2018, the average sleeper was one month older, had 7,632 (1.7%) more miles, and brought $856 (1.5%) more money. Compared to January 2018, this average sleeper was 1 month older, had 8,410 (1.8%) more miles, and brought $5,181 (10.1%) more money.
Each January, we consider each model year one year older. For example, we now consider a truck of model year 2015 to be 5 years old as opposed to 4 years old last month. As such, we will provide year-over-year comparisons below. Next month, we will return to month-over-month comparisons. With that in mind, January’s average pricing was as follows:
3-Year-Old Truck: $93,883; $3,238 (3.6%) higher than January 2018
4-Year-Old Truck: $77,560; $10,956 (16.4%) higher than January 2018
5-Year-Old Truck: $61,540; $5,975 (10.8%) higher than January 2018
On a year-over-year basis, late-model trucks sold in calendar-year 2018 brought 10.7% more money than in the same period of 2017. Depreciation in 2018 averaged 0.3% per month, compared to 1.6% last year.
The freight environment declined in the late third quarter of 2018, along with manufacturing indices. This movement was largely predicted, as businesses are no longer pulling ahead inventory, and the 2018 tax cuts are now just the “new normal” on the balance sheet. Manufacturing rebounded in January, so we are not yet overly concerned about the health of the economy. But indicators are becoming more mixed, and it would be wise to start shifting to a more conservative long-term outlook for inventory management and pricing forecasts.